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Season 9 Episode 32: Culture Cost Calculator with Nicki Straza

What if the biggest threat to your company’s bottom line isn’t the market, your competition, or your strategy, but something happening within your own walls? In a recent episode of The Thermostat Podcast, host Jason V. Barger connected with workplace culture strategist Nicki Straza to explore the very real, and often staggering, financial impact of corporate culture. They examine why communication breaks down between generations and introduce a powerful tool to help leaders see the tangible price of a dysfunctional work environment. It turns out, the “soft skills” of culture have a very hard impact on your profits.

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Speaking Different Languages in a Multi-Generational Workplace

For the first time in history, we have up to five distinct generations working side-by-side. This presents a unique challenge. As Nicki Straza explains, the rapid evolution of technology and work itself means that generations often operate with fundamentally different experiences and expectations.

The issue isn’t just about different preferences for communication; it’s about the meaning behind the words we use. A Boomer’s definition of “respect” might be tied to hierarchy and tenure, while a Gen Z employee might see respect as being heard and included in collaborative decision-making. As Jason V. Barger notes, “language helps drive behavior,” but if we haven’t defined a shared language, we can’t be surprised when there’s a lack of alignment. This misunderstanding becomes the breeding ground for conflict, stereotypes, and disengagement.

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The Real Price Tag: Your Culture Cost Calculator

Many leaders know intuitively that a bad culture is costly, but they struggle to quantify it. This is where Straza’s Culture Cost Calculator comes in. She developed the tool to translate the abstract concept of culture into the concrete language of business: dollars and cents.

The costs are both direct and indirect:

• Direct Costs: These are the obvious expenses that hit the balance sheet, such as the high cost of employee turnover, recruitment fees, and temporary staffing to fill gaps.
• Indirect Costs: This is the submerged part of the iceberg. It includes decreased productivity from disengaged employees, a damaged public reputation that makes attracting top talent difficult, and perhaps most significantly, a loss of innovation. When psychological safety is low, employees won’t risk sharing the next big idea.

How big is the impact? Straza states that for an average company with 100 employees, the losses attributable to a poor culture can be as high as $1.8 million. Investing in culture isn’t an expense; it’s a high-return investment. Research shows that for every dollar invested in well-being and culture, the return can be between $2 and $7.

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It’s an Inside Job: From Ego-System to Ecosystem

So, how do leaders fix it? The conversation highlights that you can’t just “shine the fish” and put them back in a dirty tank. The solution is to clean the tank itself. This requires a fundamental leadership mindset shift from being task-first to people-first.

Jason frames this as moving from an “ego-system,” where individual self-interest dominates, to a cultural “ecosystem,” where everyone understands their role in maintaining the collective health of the environment. This begins with leadership. As Straza puts it, the culture within a leader’s own mind and heart ultimately becomes the culture of the organization. True leadership development is an inside job first. It involves leaders getting curious, questioning their need to be right, and adopting a coaching model that invites collaboration rather than dictating commands.

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Notable Quotes

“Culture eats profits for lunch if you’re not careful and you don’t actually prioritize culture.” — Nicki Straza

“Oftentimes companies make the mistake of taking the fish out, going and shining them up… and then plunking them right back in the dirty water and then wondering why things don’t change.” — Nicki Straza

“The real work of culture change is leaders. Can we change, can we grow? …the culture that’s happening in here, in between my ears and my heart, becomes the culture out here in my organization.” — Nicki Straza

“Conversations are the currency for change.” — Jason V. Barger

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Question to Ponder

1. If you had to put a dollar amount on it, what is your current culture costing—or saving—your organization?

Links and References

• To learn more about Nicki Straza and her work, please visit https://www.nickistraza.com and https://www.strazasolutions.com

Follow @JasonVBarger on social media for even more insights and new video content.

For more insights and practical tips, be sure to check out Jason V Barger’s book Breathing Oxygen. This book dives deeper into the concepts discussed in this episode and provides additional strategies for fostering a positive mindset and effective leadership.

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By incorporating these practices into your summer routine, you can breathe new life into your personal and professional endeavors. Remember, as Jason says, “The best leaders, teams, and cultures on the planet stimulate progress by recalibrating their thermostat together.”